MSFT has behaved in perfectly tradeable fashion for the past two months, although its handlers should be pilloried for not escorting the stock precisely to the 525.07 ‘D’ target shown. The seeming consolidation just beneath it will make it less enticing to get short there, although we should be grateful for the many easy buying opportunities the stock provided on the way up. The most lucrative of them, however, was anything but, since it began, as most powerful rallies do, with an insane gap on July 30 (your editor’s birthday) that would have challenged the faith of even the most ardent bulls. We usually expect retracements following such moves, but in this case there was none, and so getting long became a matter of saying “Screw the risk!” and piling on even if the stock seemed overdue for a vicious correction of 20-30 points. Looking ahead, I have my doubts that a C-D leg equal to A-B is coming. But I have underestimated this bull before, and so I’ll mention that if I’m wrong, the stock could run up to as high as 613.49. Be ready to intercept with a short offer at 545.32, the pattern’s Hidden Pivot midpoint (A=337.39 on 7/23). A stall there seems not merely likely to be tradeable, but inevitable. If the hesitation is brief or slight, however, get out of the way. All of this matters because MSFT remains the key bellwether for the bull market.
$MSFT – Microsoft (Last:517.86)